Recent literature analysing wage effects of immigration assumes labour supply is fixed across education-experience cells.
This article departs from this assumption estimating a labour market equilibrium dynamic discrete choice model on U.S.
micro-data for 1967–2007. Individuals adjust to immigration by changing education, participation, and/or occupation.
Adjustments are heterogeneous: 4.2–26.2% of prime-aged native males change their careers; of them, some switch to
white-collar careers and increase education by about three years; others reduce labour market attachment and reduce education
also by about three years. These adjustments mitigate initial effects on wages and inequality. Natives that are more similar
to immigrants are the most affected on impact, but also have a larger margin to adjust and differentiate. Adjustments also
produce a self-selection bias in the estimation of wage effects at the lower tail of the distribution, which the model corrects.

I estimate the effect of immigration on wages of native male workers correcting for endogenous allocation of immigrants
across education-experience cells. Exogenous variation is obtained from interactions of push factors, distance, and
skill-cell dummies: distance mitigates the effect of push factors more severely for some skill groups. I propose a
two-stage approach (Sub-Sample 2SLS) that estimates the first stage regression with an augmented sample of destination
countries, and the second stage with a restricted sub-sample of interest. Asymptotic properties are discussed. Results
show important OLS biases. For U.S. and Canada, Sub-Sample 2SLS elasticities average around minus one, very stable across
alternative specifications and different instruments.

Using data from the Panel Study of Income Dynamics (PSID) and the Medical Expenditure Panel Survey (MEPS), we analyze the
health gap between married and unmarried individuals of working-age. Controlling for observables, we find a gap that peaks
at 10 percentage points at ages 55-59. If we allow for unobserved heterogeneity in innate health (permanent and age-dependent),
potentially correlated with timing and likelihood of marriage, we find that the effect of marriage on health disappears below
age 40, while about 5 percentage points difference between married and unmarried individuals remains at older (55–59) ages.
This indicates that the observed gap is mainly driven by selection into marriage at younger ages, but there might be a protective
effect of marriage at older ages. Exploring the mechanisms behind this result, we find that better innate health is associated
with a higher probability of marriage and a lower probability of divorce, and there is strong assortative mating among couples
by innate health. We also find that married individuals are more likely to have a healthier behavior compared to unmarried ones.
Finally, we find that health insurance is critical for the beneficial effect of marriage.

"Understanding International Migration: Evidence from a New Dataset of Bilateral Stocks (1960-2000),"SERIEs—Journal of the Spanish Economic Association, 7(2), 221–255, June 2016.
DOI: https://doi.org/10.1007/s13209-016-0138-5.
Code and data [zip].

Abstract []

In this paper I present a new database of bilateral migrant stocks and I provide new evidence on the determinants of
international migration. The new Census-based data are obtained from National Statistical Offices of 24 OECD countries,
and they cover the total stock of immigrants in each destination country for 1960–2000, including 188 countries of origin,
sometimes in grouped categories. For each census, I keep grouped categories in a raw manner, without making imputations
to specific origin countries. In the empirical analysis, I give an explicit treatment to these grouped categories.
Results present strong evidence of heterogeneous effects of income gains on migration prospects depending on distance.
For example, a 1000$ increase in US income per capita increases the stock of Mexican immigrants in the country by a
percentage 2.6 times larger than the percentage increase in the stock of Chinese (8 vs. 3.1%).

Working papers

"Selective Immigration Policies and the U.S. Labor Market"
Work in progress, current version August 2018.
PDF version [pdf].

Abstract []

While immigration of unskilled workers often generates controversy in the political arena, there is often more consensus
in favor of selective immigration policies. This paper studies the effects of selective immigration policies on the labor
market. High skilled immigration introduces two potentially confronting forces on labor market prospects of native workers:
first, it increases the competition for skilled jobs, reducing labor market opportunities, and, as a result, reducing native
incentives to invest in human capital; second, it increases productivity through spillovers and technological progress. I
pose and estimate a labor market equilibrium dynamic discrete choice model that can account for these effects. The estimated
model is used to evaluate the labor market consequences of the two most important skill-biased immigration policies in recent
U.S. history: the introduction of H-1B visa program in 1990, and the elimination of the National Origins Formula in 1965.
Finally, I use the model to predict the level of selectivity of immigration policy that maximizes native workers' wellbeing.

"Internal Migration and Work Experience in Dual Labor Markets," with Robert A. Miller
Work in progress, current version August 2018.
PDF version [pdf].

Abstract []

This paper uses a large panel assembled from Spanish administrative data for over one million individuals assembled from tax,
welfare and employment records over a period spanning 30 years to estimate a dynamic model of individual optimization that
explains transitions and spell lengths between permanent positions, temporary positions, unemployment and exits from the
workforce. We seek to explain the sequence of job spells in temporary contracts and unemployment transitions as new entrants
in the workforce gradually acquire experience and, ultimately, transition into permanent contracts. The career mobility of
young workers is jointly determined with geographical and occupational mobility. Thus we investigate how different types of
labor market experience and welfare entitlements affect job search behavior, employment duration, and migration patterns over
the life cycle.

"Expectations, Satisfaction, and Utility from Experience Goods: A Field Experiment in Theaters,"
with Pedro Rey-Biel, Ayelet Gneezy, Uri Gneezy, and Dominique Lauga
Barcelona GSE Working Paper 944, September 2018.
PDF version [pdf].
A post on this article appeared in the
Barcelona GSE Focus blog.

Abstract []

Understanding what affects satisfaction from consumption is fundamental to studying economic behavior. However, measuring
subjective hedonic experiences is not trivial, in particular with experience goods in which quality is difficult
to observe prior to consumption. We report the results of a field experiment with a theater show in which the audience pays
at the end of the show using pay-what-you-want pricing. Through questionnaires, we measure expected enjoyment before the show,
as well as realized enjoyment after it ended. We find that individuals with a larger positive gap between reported enjoyment
expectations and realizations pay significantly more. Neither expected nor realized enjoyment have a significant effect in
predicting payments once we control for the expectation-realization gap.

Old research papers

"Reconciling Spatial Correlations and Factor Proportions: A Cross-Country Analysis of the Economic Consequences of Immigration,"
CEMFI working paper 0802, June 2011.
PDF version [pdf].
Previously circulated under the title "The Impact of Immigration on Productivity".

Abstract []

This paper contributes to the literature of the economic consequences of immigration using cross-country data from a new bilateral
dataset on international migrant stocks based on the one presented in Llull (2011). The paper identifies the effect of immigration
on wages —proxied by GDP per capita— and employment prospects —employment rate, hours worked, and unemployment
rate— estimating a "national level spatial correlation" from 24 OECD countries over the period 1960 to 2005.
Endogeneity of immigration is instrumented by push-targeting interactions: the interaction of a push factor, which motivates
migration from a country (war, political environment, and demographic and economic factors), with a geography-based targeting
or bilateral factor, which determines the destination country of those migrants (distance). For example, a war in Algeria is going
to push more immigrants to France than to Australia. The main result is that, contrary to the cross-city estimates in the literature,
the national level spatial correlation is sizeable, implying important negative elasticities for income and employment with respect
to immigration.

Traditional models of brain drain stress its negative impact on the welfare and growth of sending economies, while new
models introduce the possibility of brain gain through several channels (human capital, remittances, return migration
or FDI and trade linkages). We test all these theories by estimating cross-country individual regressions for each channel,
and a system of equations to assess the overall effect of brain drain on economic growth. Results suggest a negative effect
on human capital stock, negligible on remittances (controlling for total migration) and a positive effect on trade and FDI.
The net impact of skilled migration on economic growth remains ambiguous.